27^th July 2023, Zug, Switzerland – VARO Energy (“VARO”) today announces it has successfully completed a $3.33 billion financing, comprising a $1.13 billion loan and a $2.2 billion Borrowing Base Facility. The issuance results in the upsizing of its corporate debt facilities with a highly flexible structure including $831 million of additional capital to invest in the ONE VARO Transformation strategy.

• Initial debt launch oversubscribed: with the loan size increased by 13% from the original $1 billion to $1.13 billion due to demand.
• Banking syndicate expanded: with a total of fifteen lenders and five sureties in the syndicate, including four new lenders joining the round alongside VARO’s existing lending banks.
• $165 million green loan raised for first time: VARO successfully met the stringent ESG criteria for the partial refinancing of the Bio Energy Coevorden (“BEC”) acquisition.
• Refinanced Borrowing Base Facility (BBF) and Ancillary Guarantee Facility (AGF): strong demand from banks and sureties in refinancing $2.2 billion BBF and $710 million AGF.
• Increased financial flexibility: both the Revolving Credit Facility (“RCF”) and Term Loan (“TL”) facility are unsecured.
• New funds raised invested in delivering ONE VARO Transformation strategy: positioning VARO as the energy transition partner of choice supporting customers to decarbonize.

The financing announced today is an important step towards realising VARO’s plans to invest $3.5 billion over the five years to 2026. This investment, two thirds of which will go into VARO’s sustainable energies business, will support the scaling and development of five strategic growth pillars: biofuels, biogas, e-mobility, nature-based carbon removals, and hydrogen.

Since launching the ONE VARO Transformation strategy in July 2022 the company has made material investments in biogas through the acquisition of BEC, Northern Europe’s largest biogas facility, and Renewable Energy Services (“RES”), a leading trader of biogas and Green Certificates. VARO has also increased its stake and announced expansion plans in E-Flux, the leading provider of software for vehicle charging for commercial vehicles and signed a Memorandum of Understanding with Lufthansa to supply Sustainable Aviation Fuel.

Commenting on the successful financing round, Dev Sanyal, CEO of VARO Energy, said:

”In the last year we have executed on our ONE VARO Transformation strategy with acquisitions in biogas, e-mobility and biofuels. With this $3.33 billion financing, VARO reaches another important milestone. First, the loans significantly boost our financial strength to accelerate the transformation of our business. Second, the level of interest shown by the lenders and the securing of our first ever green loan demonstrates confidence in our strategy to reach net zero by 2040 and become the energy transition partner of choice for customers.“

About the financing round

The $1.13 billion loan placement consists of a new unsecured $550 million Revolving Credit Facility (“RCF”) with a 3 year term and an unsecured $581 million Term Loan (“TL”) with a 5 year term. The TL includes $300 million of existing debt refinancing and $281 million of additional capital which, combined with the RCF, provides $831 million of funds to invest in VARO’s sustainable energies businesses across its five growth pillars.

The TL includes a $165 million green tranche associated with the refinancing of the BEC biogas manufacturing facility in The Netherlands. The green loan marks an important milestone for VARO Energy as it represents the first time the company has been able to place a loan that complies with the stringent criteria of the Loan Market Association Green Loan Principles, as independently assessed by ISS ICS.

In addition, VARO successfully refinanced its $2.2 billion BBF and its $710 million AGF.

Participating institutions

SMBC Group acted as the Documentation Agent for the TL/RCF. ING Bank N.V. acted as the Documentation Agent for the BBF. Euler Hermes S.A. (trading as Allianz Trade) acted as the Documentation Agent for the AGF. ING Bank N.V. acted as the Sustainability Coordinator for the TL/RCF.

In the RCF/TL, SMBC Group, Mizuho Bank, Ltd, MUFG Bank, Ltd, ING Bank N.V., KfW IPEX-Bank GmbH, Coöperatieve Rabobank U.A., Oversea-Chinese Banking Corporation Limited, Société Générale, HSBC Continental Europe and Santander Corporate & Investment Banking (Santander CIB) acted as Bookrunning Mandated Lead Arrangers. Deutsche Bank Luxembourg S.A, Natixis and CA Indosuez (Switzerland) SA acted as Mandated Lead Arrangers. Credit Suisse (Switzerland) Ltd., Banque Cantonale de Genève acted as Lead Arrangers. ING Bank N.V. is the Facility Agent. ING Bank N.V., MUFG Bank, Ltd, Deutsche Bank Luxembourg S.A., HSBC Continental Europe, SMBC Group, Mizuho Bank Europe N.V., KFW Ipex-Bank GmbH, Société Générale, Oversea-Chinese Banking Corporation Limited, Banque Cantonale de Genève, Coöperatieve Rabobank U.A. participated in the green loan.

In the BBF, SMBC Group, Mizuho Bank, Ltd, ING Bank N.V., Amsterdam, Lancy/Geneva Branch, Deutsche Bank AG, Amsterdam Branch and Coöperatieve Rabobank U.A., acted as Bookrunning Mandated Lead Arrangers, MUFG Bank, Ltd, KfW IPEX-Bank GmbH, Natixis, Oversea-Chinese Banking Corporation Limited, Société Générale, Credit Suisse (Switzerland) Ltd and CA Indosuez (Switzerland) SA acted as Mandated Lead Arrangers. Deutsche Bank Amsterdam Branch is the Facility Agent and ING Bank N.V. is the Security Agent.

Euler Hermes S.A. (trading as Allianz Trade), Atradius Crédito y Caucion SA De Seguros y Reaseguros, Netherlands Branch, Chubb European Group SE, Netherlands Branch, Tokio Marine Europe S.A., Netherlands Branch and Zurich Insurance Plc, Netherlands Branch acted as Lead Arrangers in the AGF. Euler Hermes S.A. is the Facility Agent.

About VARO

VARO Energy (“VARO”) is the partner of choice for customers in the energy transition by providing sustainable and reliable energy solutions. Engine 1 includes conventional energies manufacturing, storage, distribution, marketing, and trading. Engine 2 activities are focused on sustainable energies and include biofuels, biomethane and bio-LNG, green hydrogen, e-mobility, and nature-based carbon removals. VARO plans to invest around $3.5 billion over the 2022-26 period, with two-third committed to sustainable energies. The company has a net zero target for scope 1, 2 and 3 by 2040. VARO is a Swiss-based private company, whose main shareholders are Carlyle International Energy Partners and Vitol.

VARO Media Relations
Florence Lebeau / Georgiana Mystakidi
Phone: +41 (0)79 9256079
Email: [email protected]

Brunswick
Will Medvei / Nabhan Malik (UK)
Phone: +44 (0) 20 7404 5959
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Christoph Schäfer (Germany)
Phone: +49 (0)160 1679 721